The Lebanese prime minister has called for an immediate ceasefire between Israel and Hezbollah militants, saying his country "has been torn to shreds".

Fouad Siniora said more than 300 people had been killed and 500,000 others displaced in a week of Israeli attacks.

Israel says it carried out 80 air strikes in Lebanon in the early hours of Thursday morning.

And it says its soldiers are now fighting Hezbollah militants along the border just inside Lebanon.

The clashes are taking place north of the Israeli village of Avivim, an Israeli Defence Force spokeswoman said.

On Wednesday evening, Israel said a wave of aircraft dropped 23 tonnes of explosives on a bunker in the south of Beirut where senior Hezbollah figures, possibly including leader Sheikh Hassan Nasrallah, were believed to be hiding.

But Hezbollah issued a statement saying the building targeted was a mosque under construction and "no Hezbollah leaders or personnel were killed in the strike".

Twenty-nine Israelis have died - including 15 civilians killed by rocket attacks - since the Israeli offensive against Hezbollah militants began eight days ago.

On Wednesday, two children were killed in Nazareth by Hezbollah rockets.